An outside supplier has offered to make and sell the part

Assignment Help Accounting Basics

Reference no: EM13581500

An outside supplier has offered to make and sell the part to the company for $23.60 each. If this offer is accepted, the supervisor's salary and all of the variable costs, including direct labor, can be avoided. The special equipment used to make the part was purchased many years ago and has no salvage value or other use. The allocated general overhead represents fixed costs of the entire company. If the outside supplier's offer were accepted, only $3,200 of these allocated general overhead costs would be avoided. In addition, the space used to produce part U13 would be used to make more of one of the company's other products, generating an additional segment margin of $13,400 per year for that product.

What would be the impact on the company's overall net operating income of buying part U13 from the outside supplier?

Reference no: EM13581500

Questions Cloud

This special order would have no effect on the companys : direct labor is a variable cost. the special order would have no effect on the companys total fixed manufacturing

Assume instead that the company discovered the errors after : error correction at the end of 2014 while auditing sandlin companys books before the books have been closed you find

Fillip corporation makes 4400 units of part u13 each year : fillip corporation makes 4400 units of part u13 each year. this part is used in one of the companys products. the

During your audit of miles company you prepared the : during your audit of miles company you prepared the following bank transfer schedule miles company bank transfer

An outside supplier has offered to make and sell the part : an outside supplier has offered to make and sell the part to the company for 23.60 each. if this offer is accepted the

Fontenot corporation was organized in 2011 and began : fontenot corporation was organized in 2011 and began operations at the beginning of 2012. the company is involved in

A wave on a string is described : a wave on a string is described bynbspdxt3.4cmtimesnbspsin2?x8.4mt0.20s1 where x is in m and t is in s.a in what

Capriati corporation commenced operations in early 2012 the : capriati corporation commenced operations in early 2012. the corporation incurred 60710 of costs such as fees to

Isbn 978-0-07-352694-2the question is 20-38 on page : isbn 978-0-07-352694-2the question is 20-38 on page 920-921ramon martinez is the general manager of classic inn a

User Account

All Pages